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bonufazy [111]
3 years ago
14

has $ 8 comma 400 cash on hand on October 1. The company requires a minimum cash balance of $ 7 comma 300. October cash collecti

ons are $ 548 comma 310. Total cash payments for October are $ 578 comma 140. Prepare a cash budget for October. How much​ cash, if​ any, will Howard need to borrow by the end of October​?
Business
1 answer:
Oksanka [162]3 years ago
7 0

Answer:

Borrowing of $29,040

Explanation:

Whether or not Howard needs to borrow at end of October can be ascertained by computing the cash excess or shortfall a shown below:

Opening cash  balance        $8,400

Cash collections                $548,000

Cash available                   $556,400

Cash payments                  ($578,140)

Desired cash balance       ($7,300)

Cash shortfall                    ($29,040)

The company has to borrow $29,040 in order to be able to make the desired cash payment and still have the desired cash closing balance of $7,300 at end of October

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I included the details part of question so it is clearer.

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